DARSHAN CHOKHANI | 9 AUGUST, 2018
Vijay Mallya-led Force India F1 Team Sold to Lawrence Stroll Consortium
Deal signed on Tuesday
The Sahara Force India Formula 1 Team has been sold to a consortium led by Canadian businessman Lawrence Stroll on August 7, 2018 by FRP Advisory administrators. The team was put under administration during the Hungarian GP on July 28 by the High Court in London.
The petition for administration was filed by one of its drivers Sergio Perez along with his manager Julian Jakobi through Brockstone Ltd - one of the team’s creditors, along with the support of Mercedes and the team’s biggest sponsor, BWT.
This was done to push Force India into administration as a going concern where the team could still run while the administrators find the new buyers. The team took part in the Hungarian GP and was confident to see-through the whole season.
In just over a week’s time, the administrators have found its new owners with the bid won by Stroll and a group of investors involving seven people (including Stroll). They are Canadian entrepreneur Andre Desmarais, Jonathan Dudman of Monaco Sports and Management, fashion business leader John Idol, telecommunications investor John McCaw Jr, financial expert Michael de Picciotto, Stroll and business partner Silas Chou.
The deal was signed on Tuesday and it saved the future of the team as well the 405 employees with a guaranteed ongoing funding in place and the creditors to be paid in full as well. Force India’s COO Otmar Szafnauer said: “This outcome secures the future of the Force India team in Formula 1 and will allow our team of racers to compete to our full potential.
“I am delighted that we have the support of a consortium of investors who believe in us as a team and who see the considerable business potential that Force India has within F1 now and in the future. At Force India, our expertise and commitment has meant that we have always punched above our weight and this new investment ensures that we have a bright future ahead of us
“I also would like to thank Vijay, the Sahara Group and the Mol family for all of their support and taking the team as far as their circumstances would allow.” Joint administrator Geoff Rowley added: “It is rare that a company can be rescued and returned to a position of solvency.
“The quality of the various interested parties has been impressive and required careful consideration as the administration has progressed. Having followed a robust process, in the end we were left with a highly-credible offer to save the company and restore solvency.
“All creditors will be paid in full, all jobs will be preserved, and the team will have significant funding to invest in its future. Funding to support the team will be made available from today, and significantly more will be available once the company emerges from administration which we expect within the next two to three weeks.”
This is the fourth change of hand for the team based in Silverstone. It started its journey in 1991 with the Jordan Grand Prix with Eddie Jordan at the helm which ran until 2004 when it was sold to Canadian businessman Alex Shnaider in 2005 to be renamed as Midland F1 Racing.
It only existed for two seasons as Dutch sports car marquee Spyker bought it in 2007 to be named as Spyker F1 Team. However, it lasted for just the one season when Dr. Vijay Mallya stepped in along with Dutch businessman Michiel Mol to buy it and rename it to Force India from 2008 onward.
It ran as Force India until Sahara Group tagged along in 2011 for it to become Sahara Force India F1 Team. It was revealed that Mallya and Sahara held 42.5 percent of shares each, while Mol had the remaining 15 percent to his name.
The team had a stable set of owners between 2008 until the current season. Since the last year, it started to feel the financial punch and it only worsened as time went on. The owners were on the lookout of new buyers with Sahara wanting to sell their shares for the past two to three years.
However, the price at which the shares were put up, it didn’t generate huge interest. An UK-based energy drinks company Rich Energy Ltd tagged along and in fact was present in the court with a 30 million cheque to rescue the team, but the court rejected its bid and put it under administration.
It has been saved now with the new owners. The team should be able to keep its name for 2018 but it should be changed in 2019 with the license also to change from India to Canada as things stand. It remains to be seen what happens with previous owners Mallya, Sahara and Mol.
Out of the three, Mallya claims to be the largest creditor through Orange Holdings but no further details has been released about them. In his message during the Hungarian GP, Mallya wrote to his team about the administration and he hoped he can stay with the team in the future as well.